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The Business Council supports an early extension of the Empire State film production tax credit, set forth in Section 24 of the Tax Law.
Under current law, the film credit program provides an annual, capped pool of available tax credits each calendar year through 2022, inclusive. However, the program allows for credits to be awarded against future year’s tax credit caps. Specifically, the amount of credits given in each calendar year are allocated in order that projects have a complete final application. In cases where an approved applicant’s tax credit would result in total credits in a given year exceeding the maximum amount of credits allowed for that given year, the approved applicant’s credit are given priority in the immediately succeeding calendar year.
As a result, the state in effect pre-allocates a portion of future year’s tax credit pool. As a practical matter, this calls into question the availability of credits for film projects now in the planning stage, as there is currently no guarantee that credits will be available in future years when the project comes to into production, given that the current program expires in 2022.
Jobs data show that New York’s enhanced film production credit has had a significant impact in expanding this sector.
From 2009 – the year prior to the first significant increase in New York’s film credit program – through 2017, the number of jobs in New York state in the “motion picture and video production” sector (NAICS Code 512110) increased by 45 percent, almost double the national job growth rate of 27 percent. This was an increase of 15,000 jobs that, in 2017, averaged nearly $95,000 in annual wages.
Based on this positive experience, it makes economic sense for New York to adopt a program extension, and provide certainty to New York’s film production industry that the state will maintain its support for this valuable business sector.
For these reasons, The Business Council supports an extension of the Empire State film production tax credit as part of the final FY 2020 budget agreement.